The impact of China Mobile in the platform war

[ynight]

i'm now really thinking about getting one from china...it's so much cheaper than even the US price and it's unlocked.....

 

[LikeWaah]

that's clearly a big win for nokia, not much as of the chinese market is shifting(those plans are also available for other phones, we just dont know if the 920 belongs to that pool), but it indeed spells the effort china mobile will be making to push this phone to the market. Also i'm not quite so sure about the last column in the spreadsheet, it says(high end users within corporation) without explain "corporation", but my inital guess is it may be only available to the so called "big customers" i mentioned before, at least to start off. If my guess holds true, that might be a even better situation as china mobile will push 920 to those big customers really hard and we Chinese people just love to be exclusive.. Plus Nokia has the supply issue anyways...

What do you think about this development, in light of the belief that part of why Apple was unable to get the iPhone 5 on China Mobile was due to CM not wanting to subsidize the iPhone? I'm assuming it had more to do with the baseband required by CM (TD-SCMA) than subsidies. This move clearly indicates there are other factors as to why the iPhone 5 was not accepted by CM than just subsidies.


What do you think ynight?

 

[ynight]

What do you think about this development, in light of the belief that part of why Apple was unable to get the iPhone 5 on China Mobile was due to CM not wanting to subsidize the iPhone? I'm assuming it had more to do with the baseband required by CM (TD-SCMA) than subsidies. This move clearly indicates there are other factors as to why the iPhone 5 was not accepted by CM than just subsidies.


What do you think ynight?

I actually have a friend works for china mobile that is high up enough to hear stuff. So I can share some facts regarding this. Talks between apple and CM have a long history into 2012 and the main issue still remains, which is profit sharing apple always asks. Apple demands about 30%(dont believe me on numbers tho) of the usage from iphones from carries in addition to the subsidies and that's where neither of the two parties would give in. There was a time that Apple is said to drop the 30% demand but for whatever reason they didnt have a deal. Then in the following talks, the 30% was back on table again for whatever reason. Meanwhile, CM started to get deeply involved with Androids( and now WP), they subsdies almost only Android phones in the recent years. I mentioned this for a reason that may sounds ridiculous to you that CM has somewhat a quota for its annual subsidies cost that is decided by regulators instead of themselves. So think about it financially, say CM has $100b such quota, 1) invested all 100b into andriods and WPs, make 150b in income, that 50% return. 2) invested 20b into iphones, rest into others, make the same 150b, but 30% of the 20% of the 150b goes to apple, then it;s only 41% return for CM. Of course the math gets more complicated in real life, but as long as the potential new business Apple brings wouldnt make up for the lost 9%.
Also, while still being super popular, there're more and more alternatives now. The years of iphones are no longer, and that just makes the ideal deal for apple harder to reach.

I'm sure there're also other issues haunting them on the deal, but for the most part, the profit sharing itself could be a deal breaker. That said, I saw some article talking about Tmobile getting iphone in 2013 and it wouldnt subsidy those iphones. If that says something about policy changing within apple, we might see a deal with CM quite soon..Althought i'm not sure it will be a good thing for Apple's return..

 

[LikeWaah]

Thanks ynight! That was most helpful. That is definitely an interesting fact, that the government has a quota on subsidies.

Apple's insistence on profit sharing is definitely holding them back in some regards. With respect to the business world, iPhones could potentially be further accepted as a suitable BYOD, if it had Office apps available. They could, but Apple is insisting that MS share 30% of the licensing fees with them. Seems like Apple is getting to greedy, IMO. They had cornered the market originally, so it made sense to charge such premiums, but now their "dominance" is just an illusion, and thus, they cannot maintain as much of a premium as before. Only the average consumer gets ripped by Apple's pricing structure now.

 

[ynight]

I'm pretty sure one of the two companies announced the TD network support issue had been solved. They just couldnt reach a deal...Otherwise it should not be too much of a trouble for them to work out an Iphone5 T..

 

[MaximW97]

[FONT=Helvetica Neue, Arial, Helvetica, sans-serif]What do Chinese consumers think about the Apple brand?[/FONT] [FONT=Helvetica Neue, Arial, Helvetica, sans-serif]Fashion, luxury, but fading. We cannot maximize the iPhone experience in China due to lack of LTE, Google, Pandora, Facebook.. you name it. Data plans are very expensive too. So most people just use iPhone to play games and tweet (Chinese style, called Weibo), which WP totally can do.[/FONT] [FONT=Helvetica Neue, Arial, Helvetica, sans-serif]What do Chinese consumers think about the Nokia brand?[/FONT] [FONT=Helvetica Neue, Arial, Helvetica, sans-serif]Didn't it go bankruptcy or something?[/FONT] [FONT=Helvetica Neue, Arial, Helvetica, sans-serif]What do Chinese consumers think about the HTC brand?[/FONT] Exclusively for people who wants smartphones but cannot afford them.a [FONT=Helvetica Neue, Arial, Helvetica, sans-serif]What do Chinese consumers think about Huwai and ZTE, particularly in comparison to Nokia?[/FONT] NOBODY BUYS HUAWEI OR ZTE IN CHINA. At a slightly higher price you can get HTC, which sounds much younger. [FONT=Helvetica Neue, Arial, Helvetica, sans-serif]Is China really such an important market for WP8, considering the price for a WP8 smartphone, even the cheapest ones, likely cost half a months income? If so, why? I would say so. iPhone are not as wanted as before. As I said, we cannot get the most from iPhone in China. What drove people to buy iPhone are 1) the brand 2) the design, both of which are not as good today. And more people use Windows than Mac in China, because Mac is much more expensive than iPhone (duh), and many young people loves online games, which Mac can not suppor/handle. Nokia should really take the chance, price 920 correctly so more people, especially students, can buy it, and it will be a success.[/FONT]​

 

[a5cent]

that's clearly a big win for nokia, not much as of the chinese market is shifting(those plans are also available for other phones, we just dont know if the 920 belongs to that pool), but it indeed spells the effort china mobile will be making to push this phone to the market. Also i'm not quite so sure about the last column in the spreadsheet, it says(high end users within corporation) without explain "corporation", but my inital guess is it may be only available to the so called "big customers" i mentioned before, at least to start off. If my guess holds true, that might be a even better situation as china mobile will push 920 to those big customers really hard and we Chinese people just love to be exclusive.. Plus Nokia has the supply issue anyways...

Hey ynight, thanks again for your answers! Here are some more questions...

The author of the unwired article states that CM is quite generous in their offering of a "free" T920 for $62 per month over two years. That amounts to a total cost of $1488, or $31 per month just for carrier services (excluding the full retail price of the T920). Considering that the Chinese can get unlimited everything plans for $25 per month, that doesn't seem like a spectacular deal to me. From what I've learned so far, I would say it's a tad on the expensive side. Am I missing something?

If I understand you correctly, you're saying that the subsidized price is likely part of CM's effort to aggressively sell T920's to large corporate customers. This somewhat confuses me, as I suspect the upfront costs wouldn't be much of an issue for corporations. I'm assuming the lowest possible price for device + carrier service would be more important to them. Am I wrong?

Am I correct that the "free" T920 won't make much of a difference to consumers, as the monthly rates of $62 are far too expensive?

 

[ynight]

Hey ynight, thanks again for your answers! Here are some more questions...

The author of the unwired article states that CM is quite generous in their offering of a "free" T920 for $62 per month over two years. That amounts to a total cost of $1488, or $31 per month just for carrier services (excluding the full retail price of the T920). Considering that the Chinese can get unlimited everything plans for $25 per month, that doesn't seem like a spectacular deal to me. From what I've learned so far, I would say it's a tad on the expensive side. Am I missing something?

If I understand you correctly, you're saying that the subsidized price is likely part of CM's effort to aggressively sell T920's to large corporate customers. This somewhat confuses me, as I suspect the upfront costs wouldn't be much of an issue for corporations. I'm assuming the lowest possible price for device + carrier service would be more important to them. Am I wrong?

Am I correct that the "free" T920 won't make much of a difference to consumers, as the monthly rates of $62 are far too expensive?

其他四档套餐分别为：188元套餐赠送话费2599元，每月返还108元话费；228元套餐赠送话费3249元，每月返还135元话费；288元套餐赠送话费3699元，每月返还154元话费；388元套餐赠送话费4599元，每月返还192元话费。The article is missing some details about the CM pricing and the author probably called it cheap(as i did myself) compared to US or European Pricing. The chieses lines read: for the 188yuan plan, a total of 2599 will be returned to you, 108 per month.....for the 388 plan, you get 192 back each month. So if we rule out interest(time value of money), the free phone plan actually costs 190yuan a month, about$30. So it's actually much cheaper than what the english article suggests. Now that i get the math out, it actually seems to be too cheap....omg wtf!!!.......!!!

Your second question, the corporation thing is my inital guess, now that i've read the chinese websites on it, it's actually not big customer only, so my guess was wrong. But what i was saying is basically indicating that since right now there are truly very few subsidized phones on CM(note SG3, note 2 are both not subsidized now, SG3 was for a while, not anymore), subsidy 920, as a fact itself tells the dedication CM has on it. And unfront cost is actually a nonissue here since the big customers get to negotiate the details, so if they feel the upfront cost is ok, they can pay full ahead in exchange for a discount(note that CM paying back part of the bill is also a kind of financing). They get to choose, so whichever way suits better.

That said, nokia does price super competitative this time with the CM deal...cheaper than I can even dream of..Now I can only hope they sort the supply issue soon....

 

[ynight]

im now seriously thinking of getting some from china, dump the plan to friends and family, sell the 920s to europe...

 

[LikeWaah]

I can only guess, but let's do some math. You can get a $25/mo unlimited plan, but have to pay $738 for the phone at least (are there taxes in China?). Over 24 months, that adds up to $1338. Or alternatively, you can pay $62/mo and $0 for the phone, which as you said, adds up to $1488. That amounts to an extra 11% in cost: ((1488-1338)/1338), or an monthly payment that an extra 148%/mo (62-25/25).

Certainly, someone would be crazy to pay an extra 148% for no reason. But people do that all the time all over the world. Why? So they can have what they want now, not later.

So the question is, how much sooner would that allow them to get the phone? Now that depends entirely on how much that person can set aside each month for the phone, but at the rate of $37/mo, it would take ~20 months for them to save up enough to buy the phone. IOW, they probably will never buy the Lumia 920, because in a year and 8 months, there is bound to be a newer phone released. Would I be willing to pay an extra 11% to be able to get the phone 20 months sooner? Yeah, I probably would.

However, if they were able to save double that amount, at $72/mo. Would I pay an extra 11% to get it 10 months earlier? Hmm..maybe not. But even then, the extra amount, $150 would only be an extra 2 months of savings. It might be worth it to some people.

Of course, you will eventually go up to the point where it makes no sense to buy the phone on contract, but I assume for most people, the ability to have the phone now will outweigh the premium that comes along with it.

 

[LikeWaah]

My post above was drafted before ynight's post, but I went to eat dinner, then finished writing it. Didn't realize he had answered.

If the real cost per month is only about $30, **** even $35, that seems like a screaming deal, and a no brainer. That must also mean CM is HEAVILY subsidizing it.

 

[LikeWaah]

[FONT=Helvetica Neue, Arial, Helvetica, sans-serif]What do Chinese consumers think about the Apple brand?[/FONT] [FONT=Helvetica Neue, Arial, Helvetica, sans-serif]Fashion, luxury, but fading. We cannot maximize the iPhone experience in China due to lack of LTE, Google, Pandora, Facebook.. you name it. Data plans are very expensive too. So most people just use iPhone to play games and tweet (Chinese style, called Weibo), which WP totally can do.[/FONT] [FONT=Helvetica Neue, Arial, Helvetica, sans-serif]What do Chinese consumers think about the Nokia brand?[/FONT] [FONT=Helvetica Neue, Arial, Helvetica, sans-serif]Didn't it go bankruptcy or something?[/FONT] [FONT=Helvetica Neue, Arial, Helvetica, sans-serif]What do Chinese consumers think about the HTC brand?[/FONT] Exclusively for people who wants smartphones but cannot afford them.a [FONT=Helvetica Neue, Arial, Helvetica, sans-serif]What do Chinese consumers think about Huwai and ZTE, particularly in comparison to Nokia?[/FONT] NOBODY BUYS HUAWEI OR ZTE IN CHINA. At a slightly higher price you can get HTC, which sounds much younger. [FONT=Helvetica Neue, Arial, Helvetica, sans-serif]Is China really such an important market for WP8, considering the price for a WP8 smartphone, even the cheapest ones, likely cost half a months income? If so, why? I would say so. iPhone are not as wanted as before. As I said, we cannot get the most from iPhone in China. What drove people to buy iPhone are 1) the brand 2) the design, both of which are not as good today. And more people use Windows than Mac in China, because Mac is much more expensive than iPhone (duh), and many young people loves online games, which Mac can not suppor/handle. Nokia should really take the chance, price 920 correctly so more people, especially students, can buy it, and it will be a success.[/FONT]​

MaximW97, are these your opinions or are they from a website or something?

 

[ynight]

My post above was drafted before ynight's post, but I went to eat dinner, then finished writing it. Didn't realize he had answered.

If the real cost per month is only about $30, **** even $35, that seems like a screaming deal, and a no brainer. That must also mean CM is HEAVILY subsidizing it.

A screaming buy for whoever thinks the 920 is worthwhile. Compared to the rest of the world, I mean I paid 70 a month for a quite limited plan(**** I only have 200m data) to get this...a comparable plan of the 380? would easily cost over 130$ at At&t..

Sent from Lumia 920

 

[a5cent]

Certainly, someone would be crazy to pay an extra 148% for no reason. But people do that all the time all over the world. Why? So they can have what they want now, not later.

There are cultural differences though. Buying consumer goods on credit is completely normal behaviour in the U.S. In Europe that is far less so, as buying on credit is somewhat frown upon. Average household savings are also much higher in Europe. From what I've heard, the Chinese stash away an even larger percentage of their monthly income than the Europeans do. So, if I had to venture a guess, I would say such 148% deals are likely of less interest to the average consumer in China than in the U.S. Like I said... only a guess.

im now seriously thinking of getting some from china, dump the plan to friends and family, sell the 920s to Europe...

No matter how big your family is, you would soon run out of family members to dump carrier plans onto! :grin:

But seriously, that deal sounds almost too good to be true. $30 over 24 months means they end up paying $720 over two years. Depending on how you look at it, they are either getting an unlimited everything plan over two years at $5 a month, or a Lumia T920 for about $120.-

If you find a way to get those T920's straight from the factory, and you need a distributor in central Europe, let me know (assuming international ROM's can be flashed) :wink:

 

[ynight]

And the phone has a better chip, comes unlocked....
I feel someone should add all these following up discussion into the main post as these are really informative as well..
Sent from Lumia 920

 

[a5cent]

And the phone has a better chip, comes unlocked....
I feel someone should add all these following up discussion into the main post as these are really informative as well.

Go for it, you are the OP.

 

[a5cent]

As if China mobile wasn't already enough, they apparently aren't the only ones subsidizing the Lumia 920 in China.

Nokia in China is looking better and better every day.

 

[LikeWaah]

Yeah, thanks for posting that a5cent. I saw it earlier too, great news for Nokia. The stock has been holding very strong at $4.00 too.

 

[LikeWaah]

Came across this the other day:
Nokia Siemens Networks Enables Live TV broadcast in China Mobile's TD-LTE Network | LteWorld

What do you guys think? Seems like Nokia is doing a lot of demonstrations regarding their network building capacities to me.